By John Whitesides
WASHINGTON (Reuters) - Republican Mitt Romney's campaign tried to keep the domestic political focus on the U.S. economy and jobs on Monday, although the effort was overshadowed by more controversy from a foreign trip after he made remarks that upset Palestinians.
Hoping to take advantage of President Barack Obama's "you didn't build that" comment, Romney's campaign sent teams of high-profile supporters to 18 events in a dozen swing states to hammer home its message that Obama is an anti-business lover of big government.
One-time Republican presidential rivals Newt Gingrich and Tim Pawlenty, who is now a vice presidential possibility, were among the Romney supporters who fanned out across the country to push attacks on Obama for saying, "If you own a business, you didn't build that."
But Romney was forced to fight off his own controversy after he called Jerusalem the Israeli capital and said later that differences in culture powered Israel's economic success compared with the Palestinians.
Both comments angered Palestinian leaders, just days after Romney annoyed Britons during a stop in London by questioning their readiness to host the Olympic Games.
Romney pointed to the big difference in wealth between Israel and the Palestinians and suggested Israel's culture was the reason for the gap.
"If you could learn anything from the economic history of the world, it's this: culture makes all the difference," he told a fundraising event in Jerusalem.
The chief Palestinian negotiator, Saeb Erekat told Reuters that Romney's comments amounted to "a racist statement that shows a lack of knowledge."
He added, "Everyone knows that the Palestinians cannot reach their full potential given the Israeli restrictions imposed on them."
It was another bumpy day on an international trip aimed at showing U.S. voters that the former governor of Massachusetts can handle foreign policy, an area where his election rival Obama has a lead in opinion polls.
"He's been fumbling the foreign policy football from country to country. And there's a threshold question that he has to answer to the American people, and that's whether he is prepared to be commander in chief," Obama campaign spokeswoman Jen Psaki said on Air Force One.
White House spokesman Josh Earnest, asked about the comparison made by Romney between Israelis and Palestinians, told reporters in Washington that some people were looking at those comments and "scratching their heads a little bit."
Romney received words of encouragement on his visit to Poland on Monday from Lech Walesa, a former union leader and ex-Polish president, who said: "I wish you to be successful because this success is needed for the United States of course, but for Europe and the rest of the world too. Governor Romney, get your success. Be successful."
But Solidarity, the union led by Walesa in the 1980s that helped topple communism in Poland, distanced itself from Romney, who it said "supported attacks on trade unions and employees' rights."
Obama and Romney are running neck and neck in national polls ahead of the November 6 election, which has focused heavily on jobs.
Romney has criticized Obama's economic leadership and jumped on his recent "you didn't build that" comment to accuse him of being hostile to small businesses.
The Obama campaign says critics have taken that remark out of context and ignored Obama's broader point that public investment helped private businesses prosper.
Obama, headlining a $40,000-a-plate fundraiser with big-money donors at a New York hotel, did not mention that controversy or Romney's gaffes overseas, but said his campaign was being outspent, mostly on negative advertising. The event garnered nearly $2.5 million for Obama's re-election effort.
"Right now, the economy is still rough enough for enough people that this is going to be a close election," Obama told an audience that included investment banker Robert Wolf and Evercore Partners Chairman and Bill Clinton-era Deputy Treasury Secretary Roger Altman.
Appearing at a television store in Arlington, Virginia, Gingrich, former speaker of the U.S. House of Representatives, said Obama's comments on business in fact reflected his true approach.
"When you read the totality of that speech, Obama is so clearly contemptuous," Gingrich told reporters, who were the only attendees at the event. "The longer this argument goes on, the better it is for Romney."
The Romney campaign also released the latest in a series of videos featuring reactions to the comments by small-business founders. In the latest, an Ohio small-business owner says he was "ticked off" by Obama's comment.
Polls show that while Obama is well liked and seen as having done a good job on foreign policy, voters often trust Romney more to improve the economy and lower the unemployment rate of 8.2 percent.
(Additional reporting by Steve Holland in Jerusalem, Gabriel Debenedetti in Arlington, Margaret Chadbourn aboard Air Force One, Jihan Abdalla in Ramallah, and Matt Spetalnick in Washington; Editing by Alistair Bell and Peter Cooney)